With SAS®, Crédit Lyonnais Earns ROI for Analytical CRM

At a time when major changes in French retail banking began to emerge in 1997, Crédit Lyonnais had been using SAS for some time to perform statistical studies based on sample groups and panels. But while the company's use of SAS enabled it to handle sophisticated studies, it was limited to working on a targeted population – there was no way to apply results to the entire customer base. Crédit Lyonnais decided to look to SAS for solutions to help manage its broader marketing strategy in four major areas: data mining, attrition, prediction and direct marketing.

With nearly 30,000 employees, Crédit Lyonnais has three primary lines of business: network banking in France, financing and investment banking, and asset management. The group's comprehensive array of products and services cover savings and investment, credit, payment methods, insurance and consulting needs. And for customers who prefer to bank exclusively online, there is e-creditlyonnais. In all, a local network of more than 1,800 branches throughout France enables Crédit Lyonnais to serve some 6 million individual customers and more than 300,000 businesses, including tradesmen, merchants, small companies, professionals and farmers.

Powerful data mining solutions
In order to switch from a sampling to all customers, Crédit Lyonnais turned to SAS in 1998 to help build a data warehouse called SIAM (Marketing Information and Analysis System). Today, this database includes five years of history and can be tapped to perform analyses on demand.

The bank uses SAS on a national level to create indicators for forecasting or analyzing customer behavior, which are then automatically communicated to individual branches. Each branch or call center consultant can then view a customer's file on a personalized card containing all of these indicators.

Every month, as the database is updated, the indicators are automatically updated and recalculated. Each customer's net banking income can be compared to the average revenue that customer generates and to the best customer in the segment. Customers are segmented on the basis of the financial indicators established using SAS Data Mining. Then, an affinity matrix identifies the three products with the highest probability of appealing to those customers – invaluable information that helps sales consultants provide better service and increase sales.

As the marketing director of Crédit Lyonnais, points out, "What we wanted was for the operations departments to be able to use this database with simple query tools. Now they can. They have easy access and can extract information based on their needs."

Controlling attrition
A priority for Crédit Lyonnais was to be able to identify customers with a high probability of leaving the group. Using SAS, the bank developed two interlinked models that would predict attrition several months prior to a customer's departure, automatically identifying within a given customer account if, for example, automatic deductions began to fall off or assets began to decrease. The ability to detect the first signs of departure enables the company to intervene before it's too late and take steps to extend the client's "lifespan."

"We have to anticipate attrition," the marketing director emphasizes. "That's why we try to work as far upstream from departure as possible. The SAS implementation enabled us to obtain very good results: we reduced our departure rate by nearly 40 percent so that it is currently only around 6 percent."

The fight against attrition also makes it possible for Crédit Lyonnais to better assess its existing clientele. The objective is to increase the value of each customer by accelerating the process of up-selling through the product line.

Predicting customer behavior
SAS is helping Crédit Lyonnais to better understand its customers in a variety of other ways. For example, the bank is striving to convert secondary customers of Crédit Lyonnais into primary customers. The bank uses SAS to calculate the probability that a customer has assets in other banks based on his or her behavior. The bank then cross-links these potentials with the customer's current value, or net banking income.

For customers with a high probability of having assets with competitors, Crédit Lyonnais implements a personalized action plan to increase its share of their portfolios. "An already encouraging result," declares the marketing director. "We have obtained significant returns on investment. In fact, between 1999 and 2003, we went from seven to 7.7 products per customer."

Improving the return on investment in direct marketing
Crédit Lyonnais also relies on SAS solutions to launch direct marketing campaigns by product and by customer, especially via e-mail programs. The latter use the affinity matrix, potential indicators and segmentation – a set of tools that clearly contribute to improving cross-selling and the number of services a customer receives. In addition, with SAS, Crédit Lyonnais has more than doubled the number of marketing campaigns and obtained better profitability, with a ratio 10 times higher on certain highly targeted e-mail campaigns.

Building a multi-channel proactive engine
"We envision completing our approach by establishing a multi-channel proactive engine that will be completely operational in 2004," adds the marketing director. This will enable Crédit Lyonnais to make offers targeting each customer according to his or her preferred channel, and in particular on the Internet. Based on affinities relative to the products offered, the customers in question will then have the opportunity to sign up for products and services directly online.

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